Inverted Hammer: shape, meaning and how it differs from a shooting star
A small body near the bottom of the range with a long upper wick — read as a bullish reversal candidate after a decline, and why context is everything here too.
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Open the chartWhat it measures
An inverted hammer has a small body near the bottom of its range, a long upper wick at least about twice the body’s size, and little to no lower wick.
It measures a bar that pushed up hard intrabar and gave most of it back — the mirror shape of a hammer, appearing after a decline rather than an advance.
How it is calculated
These are the steps Basis performs, verified against the published definition.
- 1
Body sits in the lower portion of the range.
- 2
Upper wick at least roughly double the body.
- 3
Minimal lower wick.
- 4
Read as bullish specifically after a decline; the identical shape after an advance is a shooting star instead.
How to read it
- The failed push higher shows buyers testing resistance for the first time in the decline — tentative, and needing confirmation.
- A higher close the next bar, ideally on rising volume, is what turns this from a candidate into a confirmed reversal attempt.
Where it misleads
On its own this is one of the weaker single-bar reversal shapes — the failed push up could just as easily be a brief short-covering spike inside a continuing decline.
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Updated 2026-08-27 · Educational reference, not financial advice.